Congress Asked To Aid Poor Nations

U.S. Treasury Secretary Lawrence Summers urged Congress Wednesday to fund debt relief for poor nations, saying the issue was "a defining moral, diplomatic and economic choice" for the United States.

In this year's bill for foreign appropriations, House Republican leaders have slashed to just $82 million the administration's request for $472 million to fund debt relief.

The move undermines Washington's ability to meet its obligations under the Heavily Indebted Poor Countries plan, a scheme aimed at cutting the debt burden of the world's poorest nations in half in return for pledges to use the savings on social programs, such as health and education.

"Does the United States stand for collecting every dollar possible of debt from countries where more than half the young population faces the threat of death from AIDS?" Summers asked at a news conference on Capitol Hill.

"Does the United States stand for the idea of collecting every possible dollar of debt from countries that are able to spend less than $10 a year per person on health?"

"It is imperative for our country economically, morally and diplomatically to provide this debt relief," he said.

Foot-dragging in Congress already has stalled debt relief in Latin America and could likewise imperil debt relief to African nations, he said.

Legislation approved last year by Congress also failed to provide money for the United States to pay its share of HIPC debt-relief costs.

Some lawmakers want to tie the aid to reforms at the World Bank and International Monetary Fund - the institutions that manage the HIPC program.

Summers said President Bill Clinton would veto the current bill before Congress, which he said left "grossly inadequate funds" to help poor nations fight poverty and disease.

"We are richer than ever before and we are growing faster than ever," he said. "Yet the Achilles heel for the United States is our reluctance to engage adequately in the world."

White House chief economic adviser Gene Sperling said the issue was at "absolutely the top of the president's agenda."

If Congress refuses to fund the U.S. obligations, other Group of Seven industrialized nations that have signed on to the HIPC plan might renege on their payments, Sperling warned. Japan, Britain, Germany, France, Canada and Italy are G-7 members along with the United States.

"If the United States leads and puts its share of money into the HIPC trust fund, the rest of the world will have no choice but to follow suit," Sperling said. "If we fail, we become the excuse for every other country not to do their part."

Sperling said poor countries need the money urgently, noting that more people die in developing nations each year of infectious diseases than the number of soldiers who died in World War I.

Summers and Sperling were joined at the news conference by members of Congress who support debt relief. Among them, emocratic Rep. Barney Frank of Massachusetts said, "Nothing that Congress will do this year is crueler than its refusal to fund debt relief."

"We are talking literally about the death of children, adults, older people. We are talking about starvation, disease - unnecessary and preventable deaths - that we could stop," Frank said.

Eight countries in Africa and Latin America have so far qualified for HIPC debt relief, and international lenders hope more will qualify in coming months. Summers said relief for Bolivia and Honduras was already being delayed. More than 25 African countries might also be affected.

Separately, United Nations Secretary-General Kofi Annan urged the Group of Eight major nations - the G7 plus Russia - to speed up debt relief and widen the scheme to include other worthy countries.

Annan made his plea in a letter to G-8 leaders ahead of a summit in Okinawa, Japan, later this month.